Amendment to the "CLARITY Act" clarifying the scope of bank crypto trading activities has been passed

BlockBeats news. May 15 — Senator Cynthia Lummis proposed an amendment during the Senate Banking Committee review of the CLARITY Act, concerning the permissible scope of digital asset activities for banks and credit unions. The amendments include clarifying what transaction activities banks may conduct, and expanding the applicable scope to include insured depository institutions.

Senator Warren opposed the amendment, saying that while she recognizes that it makes some limited improvements to a part of the bill (significantly expanding the crypto-related activities that banks insured by taxpayers can participate in), it is still far from enough. Under this amendment, banks would be able to participate in decentralized finance transactions, make loans using crypto assets as collateral, directly trade crypto assets, trade crypto derivatives, and more—many of these areas could go wrong. Why are Republicans trying to shift Americans’ deposits away from small business lending and housing lending? That makes absolutely no sense. Even if this amendment passes, the next crypto crash could still drag down banks and, in turn, drag down the entire economy. We should simply delete this provision directly, rather than making small fixes on the margins and pretending the problem is solved.

The amendment was passed with 19 votes in favor and 5 votes against. The Cryptocurrency Market Structure Act (i.e., the CLARITY Act) is currently debating and voting clause by clause on the amendments.